Approaches to Brand Valuation

Interesting article on brand valuation on 4hoteliers.com website. First off all the author is corectly placing the brand as a independent category among the intangible assets of a company:

Brand and relationship intangibles: these include trade names, trademarks and trade symbols, domain names, design rights, trade dress, packaging, copyrights over associated colours, smells, sounds, descriptors, logotypes, advertising visuals, and written copy. In addition, associated goodwill (the general predisposition of individuals to do business with one brand rather than another brand) should be included.

Then the article si focusing on several approaces to brand valuation:

Continue reading

23 Elements of a Healthy Brand

A healthy strong brand has definitely has some other attributes than the best or the biggest. A healthy and a strong brand generates also more results than just bigger sales. A healthy strong brand sustain a product over time through consistency, excellent communication, providing value to its target customers. These and much more.

Here is a checklist of 23 brand health criterias as presented in Peter Cheverton’s excellent book Understanding Brands (Creating Success):

  1. is based on a proposition of genuine substance and value to the target customer
  2. communicates a clear and powerful brand definition
  3. communicates a clear ‘emotional charge’
  4. communicates an attractive and relevant personality
  5. wins, builds and retains customer loyalty
  6. is well known by the target customer
  7. is held in high esteem by the target customer
  8. communicates and evidences a unique match between the company’s capabilities and the customer’s needs
  9. is a source of competitive advantage
  10. is an investment of increasing value that others will want to own
  11. maintains its relevance over time by evolving in response to changing customer expectations and perceptions
  12. increases the profitability of the business is consistent with the business strategy
  13. makes sense within the business’s brand architecture
  14. provides a protective ‘halo’ for growth strategies
  15. provides a barrier to entry for new entrants or substitutes
  16. is uniquely positioned in the market and creates a relevant space in the customer’s mind
  17. communicates and demonstrates a clear sense of value
  18. interacts consistently with the customer on as many fronts and on as many occasions as possible
  19. cements the brand definition into the customer’s mind through interactions and positive associations
  20. is managed and supported consistently over time
  21. has values that can be applied consistently and successfully to all parts of the marketing
  22. mix and through all promotional media
  23. makes people want to get their hands on it

Visa Re-Branding – Life Takes Visa

Visa today unveiled its first new branding direction in 20 years, according to Suzanne Lyons, its executive vice president and chief marketing officer.

The tagline, ending the decades-long reign of “It’s everywhere you want to be,” is “Life takes Visa,” Lyons said. Although the tagline was used in the last couple of years in English-language communications in Latin American countries (actually Visa is using 5 different taglines for 6 different regions of the world – more here), TBWA\Chiat\Day decided to go with it and start promoting it next week during the Winter Olympics Openning ceremony.

The new brand campaign is the latest in a series of milestones marking Visa adapting its brand to its corporate evolution, with recently introduced new governance structure; new brand architecture, including a new logo and a new card design. More about the new branding campaign here: http://www.visa.com/advertising.

Corporate Branding vs. Product Branding

Product branding is a well-known phenomenon in marketing. A brand is a promise to the customer that goes beyond the generic product, the technical and physical attributes. When selling a branded product the company promises that the consumer will achieve special qualities by using the product, different qualities than when using a similar non branded or different branded product. A typical message from the company is “when using this product you will be more attracted, become better looking and signal a higher social class“. By using the branded product the consumer can communicate his/her lifestyle or wanted lifestyle.

On the other side corporate branding refers to the practice of using a company’s name as a product brand name. It is an attempt to leverage corporate brand equity to create product brand recognition. It is a type of family branding or umbrella brand.

Martin Roll, author of Asian Brand Strategy : How Asia Builds Strong Brands has an interesting view on corporate branding:

Corporate branding employs the same methodology and toolbox used in product branding, but it also elevates the approach a step further into the board room, where additional issues around stakeholder relations (shareholders, media, competitors, governments and many others) can help the corporation benefit from a strong and well-managed corporate branding strategy. Not surprisingly, a strong and comprehensive corporate branding strategy requires a high level of personal attention and commitment from the CEO and the senior management to become fully effective and meet the objectives.

Among the advantages of a corporate branding strategy we can count:

  1. the corporate brand is the face of the business strategy, portraying what the corporation aims at doing and what it wants to be known for in the market place, is the overall umbrella for the corporations’ activities and encapsulates its vision, values, personality, positioning and image among many other dimensions.
  2. corporate branding strategy creates simplicity; it stands on top of the brand portfolio as the ultimate identifier of the corporation.
  3. a coporate branding strategy can drive some cost efficiencies that can often be achieved as opposed to a large multi-brand architecture where the corporate brand plays a smaller or insignificant role.

On the other side among main disadvantages of this strategy is that products may not be treated individually, which reduces the focus on the products’ unique characteristics or that the corporate name can become synonymous with a product category

Three different strategies can be approached for corporate branding:

Branded identity is when a company uses different brands for their products that function independent from each other and the company’s brand. The strength of this strategy is the flexibility. The company can build different brands in different marked segments and for different products. If a brand is involved in a scandal it will only damage that brand, and will not hurt the other brands of the company.

Endorsed brand identity is when an organisation has a group of products or companies that it endorses with a group name and a common identity. The strength of this approach lies in the relationship of the products/companies, they can benefit from the goodwill given to others with the same common identity.

Monolithic brand identity is when a company uses only one name and one visual style for all it products. The strength is the simplicity and the potential for growth. The weakness is that one happening; one scandal can cause severe damage even to big strong brands.

6 Most Common Branding Systems

Branding systems, or architectures, can take various forms that emphasize the corporate name and image, de-emphasize the corporate name, create new brands apart from the company brand, or combine these approaches. Here is a list of the most common branding systems:

Corporate brand
Strong corporate image is synonymous with product class. Not that common in shelf goods, becoming more popular with technology companies.

Licensed brand
Used commonly in the fashion industry. Manufacturers license the name for clothing goods and brand extend into areas such as sunglasses and umbrellas.

House brand
Includes several product classes. Used by diversified companies allowing each subsidiary to operate as its own entity and target specific market segments Also used when two product lines are incompatible (i.e. Honda and Acura — economy and luxury).

Dual brands
Combining the corporate brand with strong subbrand. Subbrands can help differentiate and boost corporate brand and drive brand preference. Subbrands can become umbrella names for a family of products extensions (there are now several versions of Cheerios and almost 40 Herbal Essence product choices). Nestle added its corporate name to Kit Kat.

Co-brands
Aims to benefit both brands by raising the perceived quality of each brand. Follows rational that the very act of branding can raise familiarity and perceived quality of a product. Allows a brand exposure in product class that it could not enter on its own.

Mono brands
Strong single product brand identity without use of corporate brand. Each product identifies specific customer need. Used by large conglomerates in diversified lines such as P&G, UniLever, Beatrice. Useful when extending product line vertically to gain shelf space/market share.

Trends in Product Branding

There are two trends in product branding, which may at first seem disconnected: the focus on product experiences, and the growth of corporate branding.

People increasingly see the product experience as a key driver of the brand relationship. The quality of the product experience is growing in importance after a couple of decades when some companies perhaps lost focus on product performance, particularly in developed markets. If true innovation is defined as product change that provides real solutions to real consumer issues, then it’s not unfair to suggest that some brands ignored this in favour of quick-fix brand extensions which lacked any longer-term impact

Surface innovation that fails to truly innovate or differentiate can have a short-term positive impact on profits. This may be enough for a new product manager under pressure to deliver, but it can turn off consumers in the medium term, as marketing becomes a surrogate for product innovation and stops being truly effective.

Consumers buy products, and for many the product experience is by far their most important touchpoint. It should be stressed that, although it has been over-emphasized on occasion, the so-called softer side of the brand remains an important component of the brand alchemy. Through a brand’s emotional story, the product experience is amplified and linked to the consumer’s imaginative life – it is all a matter of balance.

The second trend is the development of corporate brands, which have traditionally stayed ‘behind the scenes’. Procter & Gamble’s name is increasingly visible on many of its brands. Its main competitor Unilever also announced early last year that they would use their corporate name in customer-facing marketing activities. We could also mention Nestlé, Danone and many others, which have been historically keen to hide their wide range of branded products from consumers. Many reasons drive the decision to appear as one company under an ‘umbrella brand’. In part it is a response to a global marketplace, but the main factor is the need to rationalise marketing spend.

Many companies have developed multi-layered and extremely complex brand architectures over the years – some for historical reasons (like brand acquisitions), some possibly due to a lack of internal cohesion or communication. The trends toward corporate branding and an emphasis on the product allow us a different perspective on what brand architecture could and should look like. They imply a simplified brand structure in which the corporate brand would directly endorse a range of product brands, with all intermediate brand levels progressively disappearing. This would clarify the offers, put the product back at centre stage for consumers, and force companies to really define their corporate brand and related values.

via